Excited — very I was thrilled when I learned that Substack’s equity crowdfunding effort would lead to an earnings call.
Sadly, due to rules and funding timing, Substack doesn’t need to detail its financials for 2022, so the startup released hard data for 2020 and 2021, as well as certain user-specific metrics from last year. Did. This provides an interesting, albeit imperfect, picture of corporate health.
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I expected to spend some time this morning pondering the morality of Substack’s choice not to share its audited 2022 results, but Dan Primack nailed that discussion this morning at Pro Rata. I made it We can’t improve his language, so we can let his Axios take care of that and focus on parsing the data instead.
So, to kill some time to cool off after Y Combinator’s Demo Day, we delve into Substack’s growth model (including the latest non-financial data), reflect on the company’s current financial position, and compare upcoming capital increases. Let’s try. its potential cash needs.
this will be fun. Think of this as a cursory glance at a partial S-1 filing. But for Series B companies. nice? at work!
A lot of data, but not enough
If you want to play along, you can read all of Substack’s released financial results here.
First, note that the company has raised a significant amount of money through 2021 to invest in its platform and grow its user base. It would be wise to remember that we were growth oriented at the time. How did it work?
The substack growth model is expensive, if effective
Substack’s total revenue grew over 400% to $11.9 million in 2021 from $2.4 million in 2020. This is exactly the kind of topline expansion that venture backers would love to see from startups in the investment cycle. The company has announced that it has raised a whopping $65 million in Series B funding in early 2021.